Mississippi completely rids of the state income tax

Mississippi just made history by passing the “Build Up Mississippi Act,” a bold new law that will gradually eliminate the state’s individual income tax entirely. Governor Tate Reeves, who signed the legislation into law on March 27, 2025, declared it a “transformative win for working Mississippians.” The act outlines a phased reduction of the state’s income tax to 3% by 2030, with automatic yearly cuts after that until the tax disappears altogether. The bill even got a surprising boost from a drafting error that actually sped up the phase-out timeline—something lawmakers leaned into with zero hesitation.

In addition to axing the income tax, the bill slashes the grocery sales tax from 7% to 5% and raises the gasoline tax by 9 cents over three years to help cover infrastructure funding. While supporters celebrate Mississippi joining the no-income-tax club alongside states like Texas and Florida, critics worry about potential budget gaps and long-term impacts on public services.